Covidien Ltd. (COV) 11/6/09 PriceWatch Alert Targets 20.37% Return

Posted: Friday, November 06, 2009 8:21 AM EDT

Covidien Ltd. (NYSE: COV) closed yesterday at $44.18. So far the stock has hit a 52-week low of $27.27 and 52-week high of $44.90. Covidien stock has been showing support around 42.33 and resistance in the 45.43 range. Technical indicators for the stock are Bullish and S&P gives COV a neutral 3 STAR (out of 5) hold rating. COV appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Jan '10 42.50 covered call (COV AT) for a net debit in the $40.88 area. That is also the break even stock price for this trade. This covered call has a 71 day duration, provides 7.47% downside protection and a 3.96% assigned return rate for a 20.37% annualized return rate (comparison purposes only). Covidien has a current annual dividend yield of 1.68%. [FBB-Seven Summits Research]

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